USA v. Sterling Centrecorp Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATE OF AMERICA and No. 2:08-cv-02556-MCE-DB CALIFORNIA DEPARTMENT OF 12 TOXIC SUBSTANCES CONTROL, 13 Plaintiffs, ORDER 14 v. 15 STERLING CENTRECORP INC., STEPHEN P. ELDER, and ELDER 16 DEVELOPMENT, INC., 17 Defendants. 18 19 In bringing the present Request for Reconsideration (ECF No. 362), Defendant 20 SC Inc., formerly known as Sterling Centrecorp Inc., (“Defendant”) asks this Court to 21 reverse the Magistrate Judge’s February 21, 2020, Order granting a motion to compel 22 further discovery filed on behalf of Plaintiff the United States of America (“Plaintiff”). ECF 23 No. 359. Once Plaintiff obtained a $30 million monetary judgment against Defendant, it 24 served discovery pursuant to Federal Rule of Civil Procedure 69 concerning alleged 25 assets valued in excess of CAD $80 million that were transferred to related parties just 26 before Plaintiff filed the instant CERCLA cost recovery action, and well after Defendant 27 was placed on notice that Plaintiff sought reimbursement for costs incurred to clean up 28 hazardous substances at a California Superfund site previously owned by Defendant. 1 Even though this case was instituted in 2008, Defendant argues that because thirteen 2 years have now passed since the transfers at issue the information has become 3 essentially irrelevant. The Magistrate Judge granted the motion to compel, and on 4 March 6, 2020, Defendant moved to reconsider that decision. 5 In reviewing a magistrate judge’s determination, the assigned judge shall apply 6 the “clearly erroneous or contrary to law” standard of review set forth in Local 7 Rule 303(f), as specifically authorized by Federal Rule of Civil Procedure 72(a) and 8 28 U.S.C. § 636(b)(1)(A).1 Under this standard, the Court must accept the Magistrate 9 Judge’s decision unless it has a “definite and firm conviction that a mistake has been 10 committed.” Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for 11 So. Cal., 508 U.S. 602, 622 (1993). If the Court believes the conclusions reached by the 12 Magistrate Judge were at least plausible, after considering the record in its entirety, the 13 Court will not reverse even if convinced that it would have weighed the evidence 14 differently. Phoenix Eng. & Supply Inc. v. Universal Elec. Co., Inc., 104 F.3d 1137, 1141 15 (9th Cir. 1997). 16 After reviewing the entire file, this Court cannot say that the Magistrate Judge’s 17 decision was clearly erroneous. A judgment creditor like Plaintiff herein is accorded “a 18 wide scope or inquiry concerning property and business affairs of the judgment debtor” 19 and is entitled “to leave no stone unturned in the search for assets which might be used 20 to satisfy the judgment.” A&F Bahamas, LLC v. World Venture Grp., Inc., No. CV 17- 21 8523-VAP-SS, 2018 WL 5961297 at *2 (C.D. Cal. Oct. 19, 2018). Given that sweeping 22 scope, the Magistrate Judge acted well within her discretion in compelling discovery, and 23 the fact that some of the discovery ordered may predate this litigation does not, under 24 the circumstances of this case, amount to an abuse of that discretion. Permitting 25 discovery as to the transferred assets does not mean that those assets will necessarily 26 1 Federal Rule of Civil Procedure 72(a) directs the district court judge to “modify or set aside any 27 portion of the magistrate judge’s order found to be clearly erroneous or contrary to law.” Similarly, under 28 U.S.C. § 636(b)(1)(A), the district judge may reconsider any pretrial order “where it is shown that the 28 magistrate’s order is clearly erroneous or contrary to law.” 1 || be available to satisfy Plaintiff's judgment; it simply recognizes that Plaintiff is entitled to 2 | understand the details of the transfers themselves so that it can decide whether to 3 || pursue the matter further in enforcement proceedings. Defendant’s Request for 4 | Reconsideration (ECF No. 362) is accordingly DENIED. 5 IT IS SO ORDERED. 6 | Dated: July 21, 2021 7 □ late JES. Whip AX XC - SENIOR UNITED STATES URTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28